2000 of 5000 Qantas job losses to happen by June

Qantas Airways chief executive Alan Joyce has said the airline plans to cut more than 2000 jobs by the end of June as it accelerates a $2 billion cost-cutting program, axing 5000 workers, freezing wages and deferring aircraft purchases.

Mr Joyce has also admitted the airline’s international business will not be able to return to a break-even position by the end of the 2014-15 financial year as previously planned due to tough competition from overseas rivals.

“The [international] business will not be producing a profit as we had originally planned," the Qantas CEO told media on Thursday morning.

He said the partnership with Emirates in the European market had been successful, but did not provide any financial figures on the benefits. Qantas has been struggling on the Singapore route in particular after shifting its European hub to Dubai as part of the Emirates partnership.

Qantas chief financial officer Gareth Evans said the carrier’s international business would bear a “significant" proportion of the cost savings.

Mr Joyce described the carrier’s overall performance as “unacceptable and unsustainable", as he faced media in Sydney on Thursday following the announcement the carrier will cut 5000 jobs, freeze wages and defer aircraft purchases.

He also hit out at foreign-backed rival Virgin Australia, saying that “Qantas can compete in any fair fight".

Delivering its half year results on Thursday morning, Qantas said it will cut 5000 jobs as it accelerates its $2 billion cost cutting plan. The cuts came as it booked a $252 million underlying loss for the six months to December 31.

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The job cuts, to be made over a three-year period, will include the loss of 1500 management and non-operational roles and the restructure of line maintenance and catering facilities and are part of an effort to reduce costs by $2 billion over the next three years.

Mr Joyce told analysts over 2000 of the redundancies would be made by the end of June.

The airline will apply a wage freeze immediately to enterprise bargaining agreements under negotiation and will propose them for other unionised staff. Executives have already taken a pay freeze.

Qantas shares had fallen 7.5 per cent to $1.175 by about 11am in response to the announcement.

“Hard decisions will be necessary to overcome the challenges we face and build a stronger business," Mr Joyce said. “I regret the need for these wide-ranging job losses, but we will do everything we can to make the process easier for employees who leave the business."